JPP Law Blog

Injunctions: protecting your business while you are in dispute

1st December, 2017

by the JPP Commercial Law Team

Picture the scene. You have just fired a rogue consultant who has set up in competition with you in breach of a restraint of trade clause in their consultancy contract. Added to this, they have taken a copy of your customer list which they have been using to tout for business. They have also been claiming falsely that you dispensed of their services unfairly because of concerns they raised about health and safety issues. What can you do? Issue a claim at court for compensation for breach of contract? Report the theft to the police? Yes, but that is not going to stop the ongoing harm being caused to your business by misuse of your confidential information; neither will it prevent further damage being caused to your reputation.

So, what can you do in this situation or any other where someone threatens your business? The answer is to apply to the court for an injunction, as Mark Glenister of JPP Law explains.

'An injunction is an order made by the court which either requires someone to take a specific action, like handing over a confidential client list, or to refrain from doing something that may be causing harm, like making false and potentially libellous allegations. They are usually made on a temporary basis where urgent action is needed to protect an individual's rights or a business's commercial interests while a bigger dispute is resolved', says Mark.

How to obtain an injunction

To obtain an injunction you either need to have already issued proceedings at court in respect of the bigger dispute, or you need to be prepared to make a promise to the court (known as an undertaking) that you will proceed to do this as soon as the injunction is granted.

So, in our example, to be eligible to apply for an injunction you would either need to have already issued proceedings for breach of contract or be prepared to do so immediately.

Conditions that need to be met

To make an injunction, the court needs to be satisfied that:

you have a strong, underlying case;

your interests are being, or are likely to be, prejudiced by the unreasonable behaviour of your opponent or their existing or intended interference with your rights; and

monetary compensation (known as damages) would not be an adequate remedy for the harm caused.

You will need to produce evidence to support your application, and if you are seeking an urgent injunction - which means that prior notice of the application is not given to your opponent - this evidence will need to include anything that could undermine your case.

Orders compelling action are known as mandatory injunctions, and those designed to prevent actions being taken are known as prohibitory injunctions.

In appropriate cases, injunctions can be obtained against people and organisations not directly involved in the bigger dispute, but whose actions nonetheless have the potential to harm you. For example, it may be possible to get an injunction to prevent a bank from allowing your opponent to withdraw money above a certain limit where you have proof to suggest that they are trying to dispose of their assets to avoid having to pay you compensation.

Are there any risks?

When making an injunction, the court will usually require you to give what is known as a 'cross-undertaking in damages'. What this means is that you must promise the court and your opponent that if it turns out that an injunction should not have been granted, you will pay compensation to your opponent for any damage the injunction may have caused them. This may be the case, for example, if the evidence you presented to secure the injunction was inaccurate or incomplete, or if, when the bigger disputed is finally determined, the court rules that your opponent was within their rights to act as they did.

For further advice on any of the issues raised in this article, or for commercial law advice more generally, please contact JPP Law on 020 3468 3064 or email info@jpplaw.co.uk